THE CONSUMER PROTECTION ACT OVERVIEW 1 THE PURPOSE OF THE ACT - PDF document

THE CONSUMER PROTECTION ACT OVERVIEW 1

THE PURPOSE OF THE ACT TO PROHIBIT UNFAIR MARKETING AND BUSINESS PRACTISES; • TO PROTECT CONSUMERS FROM UNCONSCIONABLE, UNFAIR, • UNREASONABLE, UNJUST, IMPROPER TRADE PRACTISES; IMPROVING CONSUMER AWARENESS AND INFORMATION AND • ENCOURAGING RESPONSIBLE AND INFORMED CONSUMER CHOICE AND BEHAVIOUR. 2

IMPORTANCE NON COMPLIANCE WILL RESULT IN TRANSACTIONS BEING • VOID; THE ACT PROVIDES CONSUMERS WITH VARIOUS NEW • RIGHTS; • SUPPLIERS HAVE NEW OBLIGATIONS TOWARDS CONSUMERS INCLUDING ACCOUNTABILITY, TRANSPARANCY, STRICT LIABILITY; • A PERSON CONVICTED OF AN OFFENCE CAN BE HELD LIABLE FOR A FINE OR TO IMPRISONMENT; • ADMINISTRATIVE PENALTIES OF UP TO 10% OF A SUPPLIER’S TURNOVER COULD BE IMPOSED IN RESPECT OF PROHIBITED OR REQUIRED CONDUCT. 3

APPLICATION OF THE ACT • THE ACT APPLIES TO- o EVERY TRANSACTION FOR THE SUPPLY (OR POTENTIAL SUPPLY ) OF GOODS OR SERVICES ENTERED INTO IN THE ORDINARY COURSE OF BUISNESS, OCCURRING WITHIN THE REPUBLIC, (UNLESS EXEMPTED); o THE PROMOTION OF ANY GOODS OR SERVICES, OR THE PROMOTION OF THE SUPPLY OF ANY GOODS OR SERVICES, WITHIN THE REPUBLIC OF SOUTH AFRICA. 4

THE ACT EXTENDS TO A TRANSACTION IRRESPECTIVE OF WHETHER THE SUPPLIER: • RESIDES OR HAS ITS PRINCIPAL OFFICE WITHIN OR OUTSIDE THE REPUBLIC; • OPERATES ON A FOR-PROFIT BASIS OR OTHERWISE; OR • IS AN INDIVIDUAL, JURISTIC PERSON, PARTNERSHIP,TRUST, ORGAN OF STATE, AN ENTITY OWNED OR DIRECTED BY AN ORGAN OF STATE, A PERSON CONTRACTED OR LICENSED BY AN ORGAN OF STATE TO OFFER OR SUPPLY ANY GOODS OR SERVICES, OR IS A PUBLIC-PRIVATE PARTNERSHIP (APPLICATION OF THE ACT ON ALL MUNICIPALITIES OTHER THAN HIGH CAPACITY MUNICPALITIES HAS BEEN DEFERRED); OR IS REQUIRED OR LICENSED IN TERMS OF ANY PUBLIC • REGULATION TO MAKE THE SUPPLY OF THE PARTICULAR GOODS OR SERVICES AVAILABLE TO ALL OR PART OF THE PUBLIC . 5

THE ACT DOES NOT APPLY TO: • TRANSACTIONS IN WHICH THE STATE IS THE CONSUMER; • TRANSACTIONS IN WHICH THE CONSUMER IS A JURISTIC PERSON WITH ASSET VALUE OR ANNUAL TURNOVER EQUAL TO OR EXCEEDING TWO MILLION RAND; • AN INDUSTRY EXEMPTED BY THE MINISTER; • TRANSACTIONS WHICH CONSTITUTE CREDIT AGREEMENTS UNDER THE NATIONAL CREDIT ACT, BUT THE GOODS OR SERVICES THAT ARE THE SUBJECT OF THE CREDIT AGREEMENT ARE NOT EXCLUDED FROM THE AMBIT OF THIS ACT; • SERVICES TO BE SUPPLIED UNDER AN EMPLOYMENT CONTRACT. 6

IMPORTANT DEFINITIONS • WHO IS A CONSUMER? A PERSON TO WHOM GOODS AND SERVICES ARE o MARKETED IN THE ORDINARY COURSE OF THE SUPPLIERS BUSINESS; A PERSON WHO HAS ENTERED INTO A TRANSACTION o WITH A SUPPLIER IN THE ORDINARY COURSE OF THE SUPPLIER’S BUSINESS (UNLESS THE TRANSACTION IS EXEMPTED AS STATED BEFORE); ACTUAL USERS OF GOODS OR RECIPIENTS OF SERVICES o (IRRESPECTIVE OF WHETHER THAT PERSON WAS A PARTY TO THE TRANSACTION OR PAID FOR THE GOODS OR SERVICES); FRANCHISEES. o 7

 WHO IS A SUPPLIER? ◦ A PERSON WHO MARKETS, PROMOTES OR SUPPLIES GOODS OR SERVICES.  WHAT DOES SUPPLY MEAN? ◦ IN RELATION TO GOODS, INCLUDES, SELL, EXCHANGE AND HIRE IN THE ORDINARY COURSE OF BUSINESS FOR CONSIDERATION; ◦ IN RELATION TO SERVICES, MEANS TO SELL THE SERVICES, OR TO PERFORM OR CAUSE THEM TO BE PERFORMED OR PROVIDED, OR TO GRANT ACCESS TO ANY PREMISES, EVENT, ACTIVITY OR FACILITY IN THE ORDINARY COURSE OF BUSINESS FOR CONSIDERATION. 8

 WHAT DOES MARKET MEAN? ◦ TO PROMOTE OR SUPPLY GOODS OR SERVICES;  WHAT DOES PROMOTE MEAN? ◦ TO ADVERTISE, DISPLAY OR OFFER TO SUPPLY ANY GOODS OR SERVICES IN THE ORDINARY COURSE OF BUSINESS TO ALL OR PART OF THE PUBLIC FOR CONSIDERATION; ◦ TO MAKE ANY REPRESENTATION IN THE ORDINARY COURSE OF BUSINESS THAT COULD REASONABLY BE INFERRED AS EXPRESSING A WILLINGNESS TO SUPPLY ANY GOODS OR SERVICES FOR CONSIDERATION; ◦ TO ENGAGE IN OTHER CONDUCT IN THE ORDINARY COURSE OF BUSINESS THAT MAY REASONABLY BE CONSTRUED TO BE AN INDUCEMENT OR ATTEMPTED ENDUCEMENT TO A PERSON TO ENGAGE IN A TRANSACTION. 9

 TRANSACTION MEANS ◦ IN RESPECT OF A PERSON ACTING IN THE ORDINARY COURSE OF BUSINESS:- AN AGREEMENT BETWEEN OR AMONG THAT PERSON  AND ONE OR MORE OTHER PERSONS FOR THE SUPPLY OR POTENTIAL SUPPLY OF ANY GOODS OR SERVICES IN EXHANGE FOR CONSIDERATION; OR THE SUPPLY BY THAT PERSON OF ANY GOODS TO OR AT  THE DIRECTION OF A CONSUMER FOR CONSIDERATION; OR THE PERFORMANCE BY, OR AT THE DIRECTION OF, THAT  PERSON OF ANY SERVICES FOR OR AT THE DIRECTION OF A CONSUMER FOR CONSIDERATION; OR FRANCHISES  10

WHAT ARE GOODS?  ANYTHING MARKETED FOR HUMAN CONSUMPTION; o ANY TANGIBLE OBJECT, INCLUDING ANY MEDIUM ON o WHICH ANYTHING IS OR MAY BE WRITTEN OR ENCODED; ANY LITERATURE, MUSIC, PHOTOGRAPH, MOTION o PICTURE, GAME, INFORMATION, DATA, SOFTWARE, CODE OR OTHER INTANGIBLE PRODUCT WRITTEN OR ENCODED ON ANY MEDIUM, OR A LICENCE TO USE ANY SUCH INTANGIBLE PRODUCT; A LEGAL INTEREST IN LAND OR ANY OTHER o IMMOVABLE PROPERTY, OTHER THAN AN INTEREST THAT FALLS WITHIN THE DEFINITION OF SERVICE GAS, WATER AND ELECTRICITY; o 11

 WHAT ARE SERVICES? ◦ ANY WORK OR UNDERTAKING PERFORMED BY ONE PERSON FOR THE DIRECT OR INDIRECT BENEFIT OF ANOTHER; ◦ THE PROVISION OF ANY EDUCATION, INFORMATION, ADVICE OR CONSULTATION, EXCEPT ADVICE THAT IS SUBJECT TO REGULATION IN TERMS OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT, 2002 (ACT NO.37 OF 2002); ◦ ANY BANKING SERVICES, OR RELATED OR SIMILAR FINANCIAL SERVICES, OR THE UNDERTAKING, UNDERWRITING OR ASSUMPTION OF ANY RISK BY ONE PERSON ON BEHALF OF ANOTHER, EXCEPT TO THE EXTENT THAT ANY SUCH SERVICE- o CONSTITUTES ADVICE OR INTERMEDIARY SERVICES THAT IS SUBJECT TO REGULATION IN TERMS OF THE FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT, 2002 (ACT NO. 37 OF 2002); OR o IS REGULATED IN TERMS OF THE LONG-TERM INSURANCE ACT, 1998 (ACT NO. 52 OF 1998), OR THE SHORT -TERM INSURANCE ACT, 1998 (ACT NO. 53 OF 1998); o THE TRANSPORTATION OF AN INDIVIDUAL OR ANY GOODS; 12

◦ THE PROVISION OF- ANY ACCOMMODATION;  ANY ENTERTAINMENT OR SIMILAR INTANGIBLE  PRODUCT OR ACCESS TO ANY SUCH ENTERTAINMENT OR INTANGIBLE PRODUCT; ACCESS TO ANY ELECTRONIC COMMUNICATION  INFRASTRUCTURE; ACCESS, OR OF A RIGHT OF ACCESS, TO AN EVENT OR  TO ANY PREMISES, ACTIVITY OR FACILITY; OR ACCESS TO OR USE OF ANY PREMISES OR OTHER  PROPERTY IN TERMS OF A RENTAL; A RIGHT OF OCCUPANCY OF, OR POWER OR PRIVILEGE  OVER OR IN CONNECTION WITH, ANY LAND OR OTHER IMMOVABLE PROPERTY, OTHER THAN IN TERMS OF A RENTAL; AND ; RIGHTS OF A FRANCHISEE IN TERMS OF A FRANCHISE  AGREEMENT, IRRESPECTIVE OF WHETHER THE PERSON PROMOTING, OFFERING OR PROVIDING THE SERVICES PARTICIPATES IN, SUPERVISES OR ENGAGES DIRECTLY OR INDIRECTLY IN THE SERVICE. 13

FUNDAMENTAL RIGHTS THE ACT PROVIDES FOR 9 FUNDAMENTAL CONSUMER RIGHTS  BEING: ◦ THE RIGHT OF EQUALITY IN CONSUMER MARKET: ◦ THE CONSUMER’S RIGHT TO PRIVACY; ◦ THE CONSUMER’S RIGHT TO CHOOSE; ◦ RIGHT TO DISCLOSURE AND INFORMATION; ◦ RIGHT TO FAIR AND RESPONSIBLE MARKETING; ◦ RIGHT TO FAIR AND HONEST DEALING; ◦ RIGHT TO FAIR, JUST AND REASONABLE TERMS AND CONDITIONS; ◦ RIGHT TO FAIR VALUE, GOOD QUALITY AND SAFETY; ◦ SUPPLIER’S ACCOUNTABILITY TO CONSUMERS. 14

RIGHT OF EQUALITY IN CONSUMER MARKET A SUPPLIER OF GOODS OR SERVICES MUST NOT UNFAIRLY-  EXCLUDE ANY PERSON OR CATEGORY OF  PERSONS FROM ACCESSING ANY GOODS OR SERVICES OFFERED BY THE SUPPLIER; GRANT ANY PERSON OR CATEGORY OF  PERSONS EXCLUSIVE ACCESS TO ANY GOODS OR SERVICES OFFERED BY THE SUPPLIER; ASSIGN PRIORITY OF SUPPLY OF ANY GOODS  OR SERVICES OFFERED BY THE SUPPLIER TO ANY PERSON OR CATEGORY OF PERSONS; SUPPLY A DIFFERENT QUALITY OF GOODS OR  SERVICES TO ANY PERSONS OR CATEGORY OF PERSONS; CHARGE DIFFERENT PRICES FOR ANY GOODS  OR SERVICES TO ANY PERSONS OR CATEGORY OF PERSONS; TARGET OR EXCLUDE PARTICULAR  COMMUNITIES, DISTRICTS, POPULATIONS OR MARKET SEGMENTS; ON THE BASIS OF ONE OR MORE GROUNDS OF UNFAIR DISCRIMINATION AS CONTEMPLATED IN THE CONSTITUTON) (THERE ARE, HOWEVER, REASONABLE GROUNDS FOR DIFFERENTIAL TREATMENT IN SPECIFIC CIRCUMSTANCES FOR EXAMPLE, ON THE BASIS OF MINORS BEING GRANTED ACCESS ONLY WITH CONSENT OF PARENT OR GUARDIAN, EXCLUSIVE USE FOR PENSIONERS ETC) 15

THE CONSUMER’S RIGHT TO PRIVACY • THE CONSUMER HAS THE RIGHT TO: o RESTRICT UNWANTED DIRECT MARKETING (INCLUDES UNWANTED OR UNSOLICTED CORRESPONDENCE, SMS’ TELEPHONE CALLS, LETTER OR EMAILS AND TO DECLINE PARTICIPATION IN MARKETING SURVEYS)- DIRECT MARKETERS SHOULD INCLUDE AN OPT OUT OPTION; o REGISTER A PRE-EMPTIVE BLOCK ON A REGISTER TO BE OPERATED OR RECOGNISED BY THE COMMISSION (OUR UNDERSTANDING IS THAT NO REGISTER IS CURRENTLY IN EXISTANCE AND THAT THE COMMISSION IS STILL IN THE PROCESS OF APPROVING BIDS FOR RECOGNITION AS AUTHORITIVE REGISTRIES, HOWEVER, THE DIRECT MARKETING ASSOCIATION OF SOUTH AFRICA SHOULD PROBABLY RECEIVE RECOGNITION FOR THEIR OPT OUT REGISTER IN DUE COURSE, WHICH REGISTER IS CURRENTLY ONLY USED BY THEIR MEMBERS) 16